When I was a teen, an IRS agent lived across the street from my family.
No one said anything to him about it, but everyone looked at him as though he were in the mafia. Which is closer to the truth than I realized at the time. People were a bit suspicious and standoffish around him. And he didn’t really socialize much.
He acted guilty because he was.
Of course, I was just a teen. Perhaps the adults didn’t think they were acting that way toward him. It’s certainly the vibe I got, though.
This was back before concealed carry “laws” were spreading around the country, and he was the only person I knew of who routinely carried a gun. Honestly, I don’t remember whether he open carried, but if he didn’t I’m not sure how everyone knew.
I’m in favor of everyone other than government employees carrying weapons. I am not in favor of anyone working a “job” that allows them to do things which are unethical (theft/”taxation”) or to do ethical things illegitimately forbidden to the rest of us (carrying weapons).
I knew at the time there was something not quite right about him and his “job”. Now I know exactly what it was.
My older children attend a self-directed learning center for unschoolers a couple of days a week. I love to hear the stories they share about what they do during the day. Classes are offered and are generated based on the young people’s interests, but they are entirely voluntary. Kids can attend classes or do their own projects, either independently or collaboratively, during what is known as “open hangout.” No one directs the hangout. Adults are present to facilitate and help if needed, but they don’t orchestrate the children’s work and play. The kids are free to create at will.
One creation that has been ongoing for months during open hangout is the development of a marketplace and its associated currency, known as myafo. It turns out, some of the kids want to tax the businesses in the marketplace “because that is how it is.”The kids create myafo using crayons and hot glue to make colorful, round gems and then use this currency to “buy” items that are produced for sale in the myafo marketplace. It’s been interesting to hear about the evolution of this economy and its unit of exchange, including the successes and setbacks.
Lately, as the marketplace gains popularity among the young people at the learning center, there have been discussions about creating a central bank and the potential issues related to that. There have also been conversations about power and control. Not surprisingly, one discussion that piqued my interest related to taxes. It turns out, some of the kids want to tax the businesses in the marketplace “because that is how it is.”
Others have more magnanimous reasons for taxation, such as using the taxes as a method of charity to allow kids who are new to the center, or who attend irregularly, to fully participate in the marketplace by receiving an allotment of myafo out of the collected taxes. It was called a charity tax. Some children disagreed with the tax idea and suggested that everyone be encouraged to voluntarily donate some of their myafo to help the newcomers. After all, forced generosity isn’t charity; it’s coercion.
It will be interesting to see how the myafo marketplace matures and how the kids address conflicts related to their growing economy. The issues they grapple with are big, and even we adults haven’t figured them out in real life. I am glad to see that dialogue and debate are central to the young people’s decision-making and that it is all completely child-driven. Trade is a fundamental process of human betterment.The kids, who range in age from about six to 14, created this project all on their own, with no adult prompting and no adult interference. It reveals how the idea of peaceful, voluntary cooperation through trade is something humans gravitate toward. Indeed, they have for millennia.
The history of trade dates to prehistoric times, as individuals sought to improve their well-being through trade. Someone has something to barter or sell that someone else wants to barter or buy, and both parties are better off as a result of the exchange. Trade is a fundamental process of human betterment. As it has spread during modern times, particularly when unencumbered by kings, dictators, and other central powers, free trade has led to growing global prosperity and astonishing reductions in poverty.
FEE’s Dan Sanchez goes so far as to say trade is what makes us human and quotes Adam Smith, who wrote in The Wealth of Nations of humans’ “propensity to truck, barter, and exchange one thing for another.” Smith continues:
It is common to all men, and to be found in no other race of animals, which seem to know neither this nor any other species of contracts. (…) Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that.
While I’ve spoken about this many times, it keeps coming up so I figured I would do a formal analysis. I’m well-aware this will have no impact on those who use this tactic to avoid discussion, such as lawyers and bureaucrats; this is for those who may be victims of this pernicious method of shouting down a valid argument. Ironically, as will be shown, it’s those screeching “frivolous” that are usually raising a truly frivolous argument. Yelling frivolous is a distraction technique, don’t be fooled by it.
Anyone who has ever challenged the legitimacy of government and the application of their sacred writ, called “laws,” will be familiar with this tactic. When the accuser admittedly has no evidence, they just start shouting “frivolous argument” as if that magically creates facts to support their claim.
What is a frivolous argument? There are usually two constants, it’s not just an argument lacking in merit or arbitrarily denied by a traffic court judge: “An appeal [argument] is not frivolous just because it has no merit” Applied Business Software, Inc. v. Pacific Mortgage Exchange, Inc., 164 Cal. App. 4th 1108, it must also be brought in bad faith:
“frivolous. So clearly and palpably bad and insufficient as to require no argument or illustration to show the character as indicative of bad faith upon a bare inspection…Strong v Sproul, 53 NY 497, 499.” Ballentine’s Law Dictionary, 3rd Ed., page 503.
Black’s Law Dictionary adds to this (also quoting Strong v Sproul):
“…where it does not controvert the material points of the opposite pleading, and is presumably interposed for mere purposes of delay or to embarrass the opponent…” 4th Ed, page 796.
A frivolous argument has three elements:
doesn’t controvert the material points; and
is brought in bad faith.
Now let’s look at an argument I wrote that’s been labeled “frivolous” by an administrative law judge in California and see if it meets this criteria.
“…the legal claims made against me have no factual support, the FTB knows this, and is proceeding against me anyway.” The legal claim referenced is the claim the laws apply because the target of the assessment is physically in California or has a California source of money. The FTB argues their laws created an obligation, it’s a foundational claim.
We know this because several agents told us, this includes counsel for the FTB. When asked for the facts they relied on, they admittedly had nothing, counsel admitted this was an assumption (video below). Those are the facts my argument is based on, the argument follows directly from the facts.
1. Does the claim have merit? Yes; the FTB and IRS operate under the same presumption, they admit it; they claim their laws apply, gives them jurisdiction and creates obligations.
My argument is based on their admissions they don’t have evidence and don’t need evidence to support their claim. So with the FTB claim, where they admit they have no evidence and the foundation of their assessment is an assumption, there is solid factual support. Therefore, the argument is valid, it has merit because the facts support it.
The FTB and IRS are required to have evidence to support their assessments; lacking a foundational basis is referred to as a “naked assessment” to wit:
“The determination of tax due then may be one “without rational foundation and excessive,” and not properly subject to the usual rule with respect to the burden of proof in tax cases. Helvering v. Taylor, 293 US 507.” United States v. Janis, 428 U.S. 433.
The challenge is based on this principle, while my challenge is not spelled out in this or other cases I’m aware of, the legal principle is what’s relevant. The FTB’s assessment is “without rational foundation” by their own admissions.
The argument has merit because it is based on a sound legal principle, supported by the agents’ own admissions.
2. Does it “controvert the material points” made by the FTB or IRS? Yes; by their own admission they operate under the presumption the laws apply because you’re physically in California or have a California source of money; and by their own admission they have no evidence, it’s an assumption. It’s logical and consistent with the facts.
3. Is it brought in bad faith? No; it’s based on facts, and a sound legal principle that “controverts the material points” raised by the FTB or IRS. It’s a logically, legally, and factually consistent argument.
None of the three elements of a “frivolous argument” are present proving the argument is not frivolous; it may be wrong, but it’s not frivolous. It’s possible the facts as alleged are not true, but that is what a hearing is for, to determine if the alleged facts are true. In the above video you can hear the agent admit the assessment’s foundation, the applicability of the laws, is an assumption. An assumption is not a “rational foundation.”
If it’s obvious it’s not a frivolous argument, then why do tax agents and their lawyers (with and without black robes) insist it is and threaten thousands in sanctions? Because they have a vested interest in the system taking property by force (taxation). They are the ones raising an argument that has no rational foundation and is brought in bad faith. I’ve had tax agents claim they don’t need evidence. That’s frivolous, not pointing out their claim lacks factual support.
What they are really saying is just challenging their foundational claim is somehow a frivolous argument or calling out their frivolous argument is itself frivolous. That is proof of bad faith.
What they do is strawman the actual position claiming:
“Appellant’s inquiry is entirely nonsensical, and while we are unsure of the exact import of this statement, it appears to be based on the meritless contention that California does not have jurisdiction to impose a personal income tax on appellant.”
No, the contention is: the FTB admitted their foundational claim is the constitution applies because there was California source of money. When asked for evidence, they admittedly had none and agreed it was an assumption. We have never made the above claim, this is done to justify ignoring the actual issue. They know what the actual issue is because the “entirely nonsensical” argument is cited just before the above quote:
“Moreover, in her briefs, appellant states that she had previously contacted FTB staff and [FTB counsel] regarding the proposed assessments at issue, and that these individuals failed to provide evidence that the “constitution” applied to her.”
First, the claim is not “entirely nonsensical” it’s based on the FTB’s own admissions and used as an insult, they also use “legalistic gibberish.” What this administrative law judge really thinks is frivolous, is challenging the FTB’s claim the laws apply to appellant. Questioning the FTB’s legal claim is the frivolous argument to him. This cow is so sacred to this bureaucrat he’s threatening a five-thousand dollar sanction for just questioning it and pointing out it’s admittedly an assumption. Like the pope admitting he just assumes the gods are real and anyone quoting him is raising a frivolous argument. By the way, this is the same bureaucrat allowing the FTB to lie with impunity in their pleadings. No bias there I guess.
Some claim the courts have already ruled the argument frivolous for decades as if that changes anything, it doesn’t. Because just as this ALJ is wrong, so are the courts for the reasons above.
It must also be noted they are not addressing this actual argument in those cases, just like the ALJ does here. If you look at the cases, the frivolous arguments are all arguments of legal interpretation, not issues of fact. This ALJ cites Appeals of Dauberger (82- SBE-082) 1982, as support; the type of arguments included are: wages not income without meaning of statute, not a taxpayer within meaning of statute, federal reserve notes are not legal tender, and the Fifth Amendment prohibits the requirement to file a tax return. Not a single issue of fact cited as a frivolous argument.
If it’s truly frivolous to challenge this legal claim, then that’s proof the system is rigged. Irrefutable presumptions are unfair and violate due process because they cannot be challenged, there is no defense, even against an assumption, Vlandis v. Kline, 412 US 441. Yes, this is about legislative presumptions, but the principle of fairness is what is relevant because due process requires notice and opportunity to defend at a meaningful hearing, Goldberg v Kelly, 397 US 254 (1970).
It’s not a so-called “frivolous argument” to point out someone’s foundational claim is admittedly an assumption, it’s a statement of fact.
So when they start chanting frivolous, call them on it, ask them what makes an argument frivolous and not just wrong. Ask them to point out what part of the argument is false; because the underlying facts are not and since the conclusion is drawn directly from the facts, the conclusion is accurate.
The argument the FTB or IRS has failed to support their claim the constitution applies, has merit because 1) it is based on their own admissions, 2) it controverts material points because they admit to not having evidence, and 3) because it’s based on a sound legal principle and the FTB’s own admissions, there is no bad faith.
Regardless of the chants from lawyers and bureaucrats, the argument is not frivolous.
The American Revolution was sparked in part by unjust taxation. After all, the colonists in Boston rebelled against Britain for imposing “taxation without representation,” and summarily tossed English tea into the harbor in protest in 1773.
Nowadays Americans collectively spend more than 6 billion hours each year filling out tax forms, keeping records, and learning new tax rules according to the Office of Management and Budget. Complying with the byzantine U.S. tax code is estimated to cost the American economy hundreds of billions of dollars annually – time and money that could otherwise be used for more productive activities like entrepreneurship and investment, or just more family and leisure time.
The majority of these six billion hours sacrificed by Americans to Washington each year goes to complying with a tax that didn’t even exist until 100 years ago – the federal income tax.
Worse still, this tax has become a political weapon for Washington to incentivize certain activities (home ownership, charitable giving, etc.) and to punish others. It’s a tax that follows Americans wherever they go in the world, and it’s one that was originally sold to the American people by President Woodrow Wilson as a means of “soaking the rich” during the so-called Gilded Age.
How did a country that was founded on the concept of limited government come to embrace such a draconian policy? And what does it say about Washington that tax reform has become synonymous with class warfare and corporate lobbyists?
Read on to learn the history of the 16th Amendment – which authorized the federal collection of an income tax – and how that power has ultimately meant the growth of Washington at the expense of just about everyone else.
Usually, the more I learn about something the more I appreciate it.
There have been many times when a friend has introduced me to something I knew next to nothing about; something they were enthusiastic for, and before long I had gained a new appreciation. It doesn’t necessarily mean it becomes something I’m seriously interested in, but I can still appreciate it through new eyes.
Recently I was introduced to the history of the Three Stooges by a friend who runs the internet’s most in-depth Three Stooges fansite. I had never given them much thought, beyond watching them on cable TV as I got ready for school when I was a kid. But learning about them as real people with a real story gave me a new perspective and a whole new appreciation for them.
I’ve experienced similar things with karaoke, cats, and writing, with some of these things becoming important parts of my life.
Other times I have been introduced to something, and the more I learned about it the more I grew to dislike it; the less I’m willing to tolerate it.
Government — or more accurately, “the state” — for example.
In some cases, ignorance truly is bliss.
The more I learn about government’s origins and its true nature the less tolerance I have for it. I see no reason to pretend it is something other than a criminal mob trying to hide behind a veil of legitimacy and imaginary “consent of the governed.”
It doesn’t change what something is to make up cutesy names for it. Taxation is still theft, capital punishment is still ritual human sacrifice, “gun control” is still slavery, and police are still a street gang. Supporters can try to justify these things all day long, but nothing changes them into something other than what they really are. Their true nature remains the same.
If these are things you support, own it.
If you don’t support these things when done by freelance individuals but have been supporting them when done by government, perhaps it’s time you pick a side for the sake of consistency.
It’s possible to be consistently wrong, of course, but it’s not possible to be inconsistent and be right. If this matters to you, you know what you need to do.
The more you learn, the more you know. The more you know, the more responsibility you have and the more you are challenged. Which probably explains why so many people don’t want to learn anything new.